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Texas recently became the first state to make a major investment in cryptocurrency with the purchase of about $5 million worth of bitcoin.
The state comptroller’s office, which manages financial transactions and long-term investments, confirmed the transaction to The Dallas Morning News. The purchase followed bipartisan legislation that passed this year creating a state cryptocurrency investment fund.
Similar legislation has been approved in several red and blue states, according to tracking from the National Conference of State Legislatures. This year, at least 40 states saw legislation proposed regarding cryptocurrency, digital currencies and other digital assets.
While other states, including Michigan and Wisconsin, have made pension fund investments in cryptocurrency, Texas became the first to invest state dollars, according to The Dallas Morning News.
“The industry is maturing and growing — it’ll continue to become more mainstream, and I think Texas staking out a leadership position will be very beneficial to Texans over time, similar to what the oil and gas industry has done over the last century,” Lee Bratcher, president of the Texas Blockchain Council that championed the legislation, told the Dallas newspaper. In a social media post, Bratcher said the transaction occurred late last month.
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Cryptocurrencies are digital assets, including bitcoin, that offer an alternative payment method without control of a central bank or government like other currencies. As with other assets, cryptocurrencies are purchased by governments, individuals and institutional investors in hopes that their value will rise over time. But the still-emerging market can be more volatile than traditional investments such as stocks and bonds.
New Hampshire officials recently celebrated the creation of the first municipal bond offering backed by bitcoin. State leaders there already created a cryptocurrency investment fund, though the state has not purchased any of those assets.
“We continue to evaluate our options regarding cryptocurrencies, but we are not ready to move in that direction at this time,” State Treasurer Monica Mezzapelle, told NHPR last month.
In Texas, the sponsor of this year’s legislation said the new crypto fund would help diversify state investments and provide a hedge against inflation and economic volatility.
This year, Texas lawmakers dedicated $10 million to the new fund. In a fiscal note on the legislation, the Legislative Budget Board noted the new fund would be created outside of the state treasury. The fiscal note says that “may limit the Legislature’s ability to make appropriation decisions concerning these funds in the future.”
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State interest in crypto comes as federal leaders are increasingly embracing the market.
This summer, President Donald Trump signed into law the GENIUS Act, the first major law governing digital currency. In establishing a regulatory framework for the industry, the president said he hoped the measure would instill more confidence in the industry that spent heavily to lobby federal leaders, according to the Associated Press.
“This signing is a massive validation of your hard work and your pioneering spirit,” the president told crypto executives.
Stateline reporter Kevin Hardy can be reached at [email protected].
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